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Flipkart Investors Hold Power Over Walmart

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By Published On: May 15, 20180 Comments

As part of Walmart’s deal to acquire a 77 percent share in Indian e-commerce company, Flipkart, minority shareholders could force Walmart to publicly list the business within as little as four-years.

According to a public filing, investors controlling as little as 14 percent of the company have the right to ask Walmart to take its newly-acquired business public a lot sooner than originally expected.

Details that have surfaced within the filing reportedly suggest that minority shareholders could demand Flipkart’s valuation in its initial public offering be no less than the $20.8 billion that the company commanded when Walmart and Flipkart first announced the deal.

“While the immediate focus will be on serving customers and growing the business, Walmart supports Flipkart’s ambition to transition into a publicly-listed, majority-owned subsidiary in the future,” a Walmart spokesperson said before details of the deal went public.

The $16 billion deal between the Arkansas-based retailer and the Indian e-commerce platform gave Walmart a 77 percent stake in the company, as well as a foothold in a country that reportedly has one of the world’s fastest-growing economies, especially in terms of e-commerce.

This merger will also give Walmart a leg-up over Amazon, who is also investing heavily in the Indian market but is yet to overtake Flipkart in terms of popularity and sales.

However, Walmart has told the public that its shares might fall below 77 percent over the next few years, as the initial deal allowed for other investors to purchase extra shares in the Indian business. This would mean that a greater number of investors would have to agree to a public listing before Walmart would be obliged to proceed with making Flipkart’s revenue stream public.

The deal between Walmart and Flipkart is expected to finalise later this year, and both companies have said they will continue to operate as two distinct brands.

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